Ford has announced plans to build the smallest production car engine in the company's history, a turbocharged 3-cylinder that promises to increase fuel economy while delivering the same or more power than larger four-cylinder engines it will replace.

The 1-liter motor was first unveiled in concept form in the Ford Start show car at the 2010 Beijing Auto Show. Part of the automaker's EcoBoost line of powerplants, it combines a suite of high-tech features that includes turbocharging, direct fuel injection and variable valve timing to increase efficiency and power. Ford currently employs the same technology in a 3.5-liter V6 that is available in a number of its vehicles, including the Lincoln MKT and F-150 pickup truck, where it is positioned as fuel efficient alternative to 8-cylinder engines.

According to Ford's Vice President of Global Powertrain Engineering, the three-cylinder is "one of the most technologically advanced and efficient engines" the company has ever designed.

Further details will be revealed at the Frankfurt Motor Show in September, but the engine is widely expected to be in production by 2013 and will likely find its way under the hood of the Ford Fiesta, which currently uses a 120 hp 1.6-liter 4-cylinder engine that gets up to 40 mpg highway.

Click here for a full review of the 2011 Ford Fiesta